2 décembre 2022
Tariff Meaning in Business Law
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Governments also sometimes impose tariffs on certain types of imports to stimulate activity in emerging industries. Customs duties may also apply to exported goods, but this is rare. This article deals with tariffs on imports, as the word « duty » is generally applied. If a U.S. retailer has already paid $110 for imported TVs and now has to pay $125 because of tariffs, they may be able to absorb those additional costs. Or he may try to recover those costs from his customers. From a revenue perspective alone, a country may impose an equivalent tax on domestic production (so as not to protect it) or select a relatively small number of imported products of general consumption and subject them to low tariffs, so that there is no tendency to shift resources to industries that produce (or replace) these taxed goods. If, on the other hand, a country wants to protect its domestic industries, its list of protected goods will be long and tariffs will be high. Political objectives often motivate the imposition or elimination of tariffs. Customs duties can be divided into three groups: transit duties, export duties and import duties. Tariffs are used to restrict imports by raising the prices of goods and services purchased in another country, making them less attractive to domestic consumers.
There are two types of rates: A specific rate is charged as a flat fee depending on the type of item, such as a rate of $1,000 for a car. An ad valorem duty is levied on the basis of the value of the item, e.g. 10% of the value of the vehicle. At that time, free trade experienced a 50-year resurgence, culminating in the creation of the World Trade Organization in 1995, which acts as an international forum for settling disputes and establishing ground rules. Free trade agreements such as NAFTA and the European Union have also increased. However, skepticism about this model, sometimes referred to as neoliberalism by critics, which combines it with 19th century liberal arguments for free trade, grew and Britain voted to leave the European Union in 2016. That same year, Donald Trump won the U.S. presidential election on a platform that included a call for high tariffs on Chinese and Mexican imports. Tariffs can hurt domestic manufacturers sourcing materials from abroad. Manufacturers sometimes need to source parts and materials from abroad. If a domestic manufacturer finds a cheap foreign supplier for a particular component, it can significantly reduce its production costs. Impose a tariff on imports of this component, and production costs will rise.
Critics of tariff-abolishing multilateral trade agreements – from both ends of the political spectrum – argue that these agreements undermine national sovereignty and promote a race to the bottom in terms of wages, worker protection, product quality and standards. Proponents of such agreements counter that tariffs lead to trade wars, hurt consumers, stifle innovation and foster xenophobia. However, the government decided to support domestic computer manufacturers and imposed a tariff of $200 per unit of imported computers. Due to the new plan, the price per computer increases to $1,200. As you can see in this photo above, country B can make towels cheaper than country A. Thus, the government of country A imposes a 20% tariff on all imports of towels from country B. Supporters of the tariff — all from Country A — say the tax helps protect domestic towel manufacturers. Opponents argue that consumers in country A have to pay more for towels than they should because of the tax, and that towel manufacturers in country A have no incentive to improve productivity. There are many reasons why a person or company may want to import goods or materials from abroad. Compared to domestic products, imported goods could be: governments can impose tariffs to generate revenue or protect domestic industries – especially emerging industries – from foreign competition. By making foreign-produced goods more expensive, tariffs can make domestically produced alternatives more attractive. Governments that use tariffs to benefit certain industries often do so to protect businesses and jobs.
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